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Balaji Telefilms rings profit in Q4 as margin improves

MUMBAI: Balaji Telefilms has posted a consolidated net profit of Rs 30 lakh in the quarter ended 31 March compared to a net loss of Rs 16 crore in the year-ago period.

The company’s cost of production during the quarter fell to Rs 65.9 crore from Rs 75.9 crore, while gross margin improved to Rs 28.6 crore from Rs 7.3 crore a year ago.

The Q4 FY17 EBITDA stood at Rs 5.5 crore as against EBITDA loss of Rs 18.3 in Q4 FY16. Revenue from operations increased to Rs 94.5 crore compared to Rs 83.2 crore in the year-ago period.

For the full fiscal, the company’s net loss widened to Rs 29.7 crore compared to Rs 3.6 crore in FY16 due to piracy of its movies ‘Great Grand Masti’ and ‘Udta Punjab’. Compared to an EBITDA profit of Rs 5.3, the company posted an EBITDA loss of Rs 18.1 crore.

FY17 revenues jumped significantly to Rs 421.2 crore compared to Rs 292.8 crore owing to higher revenues from the film business, as FY17 had four movie releases vs. one movie release in FY16

BTL Consolidated Financial Performance as per IND-AS

On a standalone basis, the company’s net profit swelled to Rs 12.7 crore compared to Rs 5.1 crore in the same quarter of the previous fiscal year.

EBITDA zoomed to Rs 17.8 crore compared to Rs 10 lakh in Q4 FY16. EBITDA margin for Q4 FY17 stood at 21% due to lower production expenses compared to nil in the previous fiscal year.

Revenue shot up to Rs 85 crore compared to Rs 57.1 crore due to increased number of shows at higher realisations.

For the full fiscal, net profit shrank to Rs 31 crore from Rs 37.1 crore due to weaker performance in the first half of the fiscal year. FY17 EBITDA rose to Rs 38.6 crore compared to Rs 34.2 crore. FY17 revenues jumped to Rs 284.1 crore as against Rs 256.8 crore.

BTL Standalone Financial Performance as per IND-AS

Programming hours during the quarter shrank to 241 hours compared to 247 hours in the previous fiscal year as two shows came to an end mid-quarter.

Television business – Operating KPIs 01
Despite the decrease in programming hours, revenue increased to Rs 80.9 crore from Rs 55.6 crore as realisation per hour increased to Rs 33.6 lakh from Rs 22.5 lakh.

Gross margin stood at Rs 29 crore as against Rs 16.7 crore while gross margin was Rs 12 lakh per hour compared to Rs 6.8 lakh.

For full fiscal, programming hours decreased to 960 from 1002. Revenue increased to Rs 277.9 crore from Rs 247.2 crore. Realisation per hour increased to Rs 28.9 lakh from Rs 24.7 lakh.

Gross margin rose to Rs 74.1 crore from Rs 73.3 crore. Gross realisation per hour was Rs 7.7 lakh compared to 7.3 lakh.

The company’s net loss during the quarter from its digital business narrowed to Rs 5.7 crore from Rs 5 crore million in Q4 FY16. EBITDA loss widened to Rs 7.3 crore compared to Rs 5.3 crore.

Revenue from operations was nil during the quarter as the company was in a test phase ahead of a commercial launch. It successfully launched post the quarter end with over 2 million downloads and subscribers from 75 countries.

For the full fiscal period, the company’s net loss widened to Rs 12.7 crore from Rs 7.7 crore in the previous fiscal year. EBITDA loss widened to Rs 20.3 crore compared to Rs 7.7 crore due to an increase in costs as the company scaled up for commercial launch.

As far as the movie business is concerned, the company reduced its net loss to Rs 5.1 crore as it did not have any launches during the quarter. In the previous fiscal year, the net loss stood at Rs 15.8 crore. Balaji’s EBITDA during the quarter was at Rs 3.4 crore as against Rs 13.3 crore. Revenue from operations were at Rs 10.5 crore vs Rs 18.7 crore.

The full-fiscal loss declined to Rs 44.3 crore from Rs 32.1 crore. EBITDA loss increased to Rs 32.8 crore from Rs 21.3 crore due to piracy of movies. The company estimated the loss of revenue due to piracy at approximately Rs 360 million. Fiscal revenue jumped to Rs 126.3 crore from Rs 22.5 crore.

Balaji Telefilms has investments of Rs 157.2 crore in mutual fund units as on 31 March 2017 of which Rs 105.8 crore through ALT and Rs 51.4 crore through BTL. Amount invested until 31 March 2017 in movies (inventory) is Rs 65 crore.

Operational highlights

Television business

  • Eight shows were running during the quarter—‘Naagin 2’ continues to be the top-rated show in the country and most of its other shows also continue to be respective slot leaders
  • Developed a strong content pipeline for the coming quarters—new shows launching across GECs while shows for the prime-time slots won on the national broadcaster Doordarshan

ALT Digital

  • Successfully launched the ALT Balaji technology platform during the quarter. The app is available across Android / iOS / Windows operating systems
  • Strategic partnerships and tie-ups executed with handset manufacturers, telecom / internet service providers, payment wallets and other related online distributor platforms

ALT Balaji is positioned as a leading GEC for the digital audience

 

  • After the quarter end, the company also launched its commercial services, which have been well received by the audiences (over 2m+ downloads and subscribers from 75+ countries globally)
  • Only OTT platform to launch with six original shows in Indian languages and continues to add more shows on a monthly basis

Movie Business

  • No movies released during the quarter. Commenced post-production and marketing for ‘Half Girlfriend’ (mid-budget Hindi film released on 19 May 2017) and ‘Super Singh’ (Punjabi regional film releasing on 16 June 2017)
  • Executed deals to lock in revenue streams across satellite / digital / music and overseas rights for both movies

Movies business built on producing differentiated cinematic content

 

Others

  • Process underway to merge Bolt Media and film production business of Balaji Motion Pictures Ltd. NCLT has directed the company to hold meetings of shareholders and creditors (scheduled for 24 May 2017). Process expected to complete in H1 FY18